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Business Recorder
3 days ago
- Business
- Business Recorder
Proposed amendments to NEP Strategic Directive-87: PD facing strong resistance from provinces
ISLAMABAD: The Power Division is facing strong resistance from provincial governments over proposed amendments to Strategic Directive-87 of the National Electricity Plan 2023–27, which aim to open the electricity market to competitive access for up to 800 MW, well-informed sources told Business Recorder. The Sindh government has raised constitutional and practical concerns, asserting that Article 157 of the Constitution empowers provinces to develop, transmit, and distribute electricity within their jurisdictions. Therefore, any federal directive must respect this mandate and not impose structural or pricing mechanisms that hinder provincial rights or market competition. In comments submitted to the Cabinet Committee on Energy (CCoE), Sindh Secretary for Energy, Mushtaque Ahmed Soomro, highlighted concerns around 'stranded costs' during the market transition. He noted that linking these costs to the full generation capacity charges of the Supplier of Last Resort (SoLR) renders open access economically unviable, undermining the very purpose of market liberalization. NE plan, SEC rules: Nepra concerned at proposed amendments Sindh has proposed the following remedies: (i) adopting a phased or tapered approach to stranded cost recovery;(ii) ensuring efficiency gains are factored into stranded cost calculations; and (iii) conducting third-party validation of the stranded cost methodology with provincial input. Sindh also criticized the proposed 800 MW cap for open access over five years, arguing that it disproportionately restricts industrial zones—particularly in Karachi, which holds the country's largest industrial load. The province called for this cap to be determined dynamically by the regulator based on grid capacity and market signals, and for provincial quotas to ensure equitable access. The provincial government further emphasized that proposed frameworks and auction mechanisms will directly affect industrial policy and economic development. To ensure fair implementation, it recommended: (i) formal provincial representation in auction framework design and oversight; and (ii) regular consultations between ISMO, the Ministry of Energy, and provincial governments for transparent auction design and demand quantum allocation. Soomro reiterated that any move toward market liberalization must align with Article 157. 'The goals of open access and market liberalization may be supported,' he stated, 'but not through a policy that discourages competition, restricts industrial growth, or marginalizes provincial participation.' To that end, Sindh recommended key changes to Strategic Directive-87, proposing the following: (i) open access charges, including grid usage, metering, and cross-subsidy fees, should be recovered from consumers opting for open access for the duration of the NE Plan or as amended by the government; (ii) the federal government must consult provinces in developing policy frameworks for stranded cost recovery, incorporating market realities and introducing incentives for competitive transparency; and (iii) for intra-provincial bilateral trading, the relevant provincial government should define the open access charge frameworks. Sindh further emphasized that capacity allocation is a regulatory function and should remain with the regulator. Where no framework exists, stranded costs should be shared by all bulk power consumers of a competitive supplier, based on the generation capacity charges applicable to similarly situated consumers of the SoLR. The Balochistan government also raised objections, particularly over the financial burden imposed on export-oriented industries. It argued that under the Competitive Trading Bilateral Contract Market (CTBCM) framework, open access should be limited to Use of System Charges (UoSC). Including stranded costs or cross-subsidies would distort fair market competition, escalate electricity prices, and deter investments in renewable energy and local projects. In a formal letter, Balochistan Secretary for Energy Dawood Bazai stated that the province does not support the inclusion of cross-subsidies or systemic inefficiencies in the open access tariff, warning that such an approach would render CTBCM ineffective and unaffordable for the province's industrial and export sectors. He further recommended that: (i) open access allocations be determined based on comprehensive market needs assessments in consultation with provincial stakeholders; and (ii) a structured, time-bound plan be developed to phase out cross-subsidies from industrial tariffs to promote sustainable energy access and economic growth. According to sources, the Khyber Pakhtunkhwa government also conveyed its concerns through official channels. However, it received the CCoE summary only hours before the meeting — chaired by the Prime Minister — that approved wheeling charges of Rs 12.55 per kWh. Copyright Business Recorder, 2025
Business Recorder
29-07-2025
- Business
- Business Recorder
PM told: DISCOs slash losses by Rs193bn
ISLAMABAD: In a rare breakthrough for the country's beleaguered power sector, Prime Minister Shehbaz Sharif was informed on Tuesday that power distribution companies (DISCOs) had slashed their losses by a staggering Rs193 billion – marking a game-changing improvement of Rs242 billion in their financial health. While chairing a high-level meeting of the Cabinet Committee on Energy, the prime minister described the turnaround as 'extremely encouraging,' calling it the first meaningful dent in the decades-long inefficiencies that have plagued the sector. He emphasised that the reduction in DISCOs' losses would facilitate the much-delayed privatisation of power distribution companies. The committee was briefed on key developments, including the approval of critical amendments to the National Electricity Plan – Strategic Directive 87. Privatisation of Discos: NA panel raises objection to selection criteria The Power Division officials said that under these amendments, wheeling charges were set at Rs12.55 per kilowatt, and competitive bidding prices were incorporated into the framework. Furthermore, the committee was informed that the Independent System and Market Operator (ISMO) had been officially operationalised, and market operations departments were established within the National Transmission and Dispatch Company (NTDC) and various DISCOs – signalling a shift towards a more robust, market-driven power sector. The prime minister commended Federal Minister for Power Awais Leghari, Federal Secretary Dr Muhammad Fakhar Alam, and their teams for their 'outstanding performance' amid tough reforms. He also directed that letters of appreciation be sent to the chief executive officers (CEOs) of power distribution companies that had shown remarkable progress. During the briefing, Power Division officials singled out Lahore Electric Supply Company (LESCO) and Multan Electric Power Company (MEPCO) for their standout performance in reducing losses. However, the meeting was also informed that the mounting circular debt had reached Rs780 billion – a glaring challenge that continues to haunt the power sector. Notably, a statement issued by the Prime Minister's Office did not elaborate further on what was discussed regarding the circular debt issue – leaving one of the sector's most pressing crises conspicuously unaddressed in official communication. Copyright Business Recorder, 2025
Business Recorder
04-06-2025
- Business
- Business Recorder
Pakistan committed to sustainable energy future: minister
ISLAMABAD: Federal Minister for Petroleum Ali Pervaiz Malik delivered a keynote address at the Ministerial Plenary session titled, 'Global Cooperation for a Resilient and Sustainable Energy Future' as part of the prestigious Baku Energy Week, emphasising Pakistan's commitment to a sustainable and resilient energy future. The event marked the 30th anniversary of the Baku Energy Forum, where Minister Malik congratulated Parviz Shahbazov, the energy minister of Azerbaijan and reiterated Pakistan's support for this effort and pledged to cooperate with this forum in every way in enabling this transition from a fossil fuel driven environment to more balanced fuel basket. Malik outlined Pakistan's strategic shift under the leadership of Prime Minister Shehbaz Sharif towards a balanced, inclusive, and sustainable energy paradigm. He highlighted that Pakistan fully understands that as we manage transition towards industrialisation, our demand will go up that needs to be complimented with the induction of renewable energy and renewable technologies into our energy landscape. Another important aspect is coherence in terms of policy evolution. For this purpose, the Cabinet Committee on Energy, chaired by the prime minister is being revived to ensure coordination between the Petroleum and Power Divisions, he said. He said that we are expanding our gas infrastructure by encouraging local exploration. We are grateful to the government of Azerbaijan and our friendly countries who are assisting us and helping us in the indigenisation of the gas resources. A lot of strategy initiatives are being taken on conservation part. Despite economic challenges, Pakistan is committed to making the gas sector sustainable by dismantling inefficiencies and implementing reforms. We are working to build a sustainable energy sector. Reform is the cornerstone of the prime minister's vision for a resilient energy future Energy Minister of Azerbaijan Shahbazov, Turkish Deputy Minister of Energy, and Director of Energy at European Commission Cristina were among the participants of the plenary session. Copyright Business Recorder, 2025
Express Tribune
04-06-2025
- Business
- Express Tribune
Govt reaffirms energy reform commitment
Listen to article Federal Minister for Petroleum Ali Pervaiz Malik reaffirmed Pakistan's commitment to a resilient and sustainable energy future during his keynote address at the Ministerial Plenary session titled 'Global Cooperation for a Resilient and Sustainable Energy Future' at the 30th Baku Energy Forum. According to a statement released on Tuesday, in his speech, Malik congratulated Azerbaijan's Energy Minister Parviz Shahbazov and pledged Pakistan's full cooperation with the forum's transition agenda, which aims to shift from a fossil fuel-driven framework to a balanced energy mix. He emphasised Pakistan's strategic realignment under Prime Minister Shehbaz Sharif's leadership towards a more sustainable, inclusive, and coherent energy paradigm. Highlighting Pakistan's ongoing industrialisation, Malik noted that the country's rising energy demand must be met by integrating renewable energy sources and technology. To support this, he announced the revival of the Cabinet Committee on Energy, chaired by the prime minister, to enhance coordination between the Petroleum and Power Divisions and ensure cohesive policy evolution. The minister also detailed Pakistan's efforts to expand its gas infrastructure by encouraging local exploration, acknowledging the assistance of Azerbaijan and other partner countries in developing indigenous gas resources. He said conservation measures and reform initiatives are underway to dismantle inefficiencies and ensure long-term sustainability of the gas sector. "Despite economic challenges, Pakistan is committed to making the gas sector sustainable by dismantling inefficiencies and implementing reforms," Malik stated. "Reform is the cornerstone of the prime minister's vision for a resilient energy future." Attendees at the plenary included Azerbaijan's Energy Minister Parviz Shahbazov, the Turkish Deputy Minister of Energy, and Director of Energy at the European Commission Cristina Lobillo. Separately in Islamabad, Malik held a bilateral meeting with Rovshan Najaf, President of the State Oil Company of Azerbaijan Republic (SOCAR), to enhance energy cooperation between the two countries. The discussion focused on deepening bilateral ties, potential joint ventures, and attracting investment in Pakistan's oil and gas sector. Malik reiterated Pakistan's intent to strengthen partnerships with leading global energy firms and stressed the government's commitment to creating an investor-friendly climate. Najaf praised Pakistan's progress in the energy sector and reaffirmed SOCAR's interest in expanding cooperation with Pakistani stakeholders.
Business Recorder
03-06-2025
- Business
- Business Recorder
Country committed to sustainable energy future: minister
ISLAMABAD: Federal Minister for Petroleum Ali Pervaiz Malik delivered a keynote address at the Ministerial Plenary session titled, 'Global Cooperation for a Resilient and Sustainable Energy Future' as part of the prestigious Baku Energy Week, emphasising Pakistan's commitment to a sustainable and resilient energy future. The event marked the 30th anniversary of the Baku Energy Forum, where Minister Malik congratulated Parviz Shahbazov, the energy minister of Azerbaijan and reiterated Pakistan's support for this effort and pledged to cooperate with this forum in every way in enabling this transition from a fossil fuel driven environment to more balanced fuel basket. Malik outlined Pakistan's strategic shift under the leadership of Prime Minister Shehbaz Sharif towards a balanced, inclusive, and sustainable energy paradigm. He highlighted that Pakistan fully understands that as we manage transition towards industrialisation, our demand will go up that needs to be complimented with the induction of renewable energy and renewable technologies into our energy landscape. Another important aspect is coherence in terms of policy evolution. For this purpose, the Cabinet Committee on Energy, chaired by the prime minister is being revived to ensure coordination between the Petroleum and Power Divisions, he said. He said that we are expanding our gas infrastructure by encouraging local exploration. We are grateful to the government of Azerbaijan and our friendly countries who are assisting us and helping us in the indigenisation of the gas resources. A lot of strategy initiatives are being taken on conservation part. Despite economic challenges, Pakistan is committed to making the gas sector sustainable by dismantling inefficiencies and implementing reforms. We are working to build a sustainable energy sector. Reform is the cornerstone of the prime minister's vision for a resilient energy future Energy Minister of Azerbaijan Shahbazov, Turkish Deputy Minister of Energy, and Director of Energy at European Commission Cristina were among the participants of the plenary session. Copyright Business Recorder, 2025
